MVR 17 billion owed in outstanding resort rent is something that the government does not expect to recover, according to Maldives Monetary Authority (MMA)’s Chairman Ahmed Sharuvash.
MMA’s Chairman Ahmed Sharuvash said the majority of figures published in the Audit Report by the Auditor General’s Office are penalties charged for late payments. The figures published in the Audit report reveal that MVR 3.4 billion is due in resort rent payments, while MVR 13.4 billion is due in penalties. This amounts to MVR 16.9 billion and a whopping 78% of total outstanding payments owed to the government.
Sharuvash detailed that the penalty fees in the tourism industry are around 182% per year or 0.5% per day. The outstanding rent payments have accumulated quite a large sum of penalties over the years. Moreover, it is something MIRA can neither write off nor recover, according to Sharuvash.
Government’s Economic Council held discussions and decided to reduce the penalty fees charged in the tourism industry back in 2019. They initially decided to reduce it down to 18% per year or 0.0490% per day. However, Sharuvash said if the decision came into effect, the majority of the outstanding payments owed in penalties to MIRA will be significantly low, despite not affecting the outstanding resort rent payments owed to MIRA.
Sharuvash also noted that most resorts currently in operation are making rent payments on time. However, islands that were leased for resort development but not yet completed along with payments associated with the moratorium issued during the COVID-19 pandemic tops the majority of the current outstanding payments.